In a Climate of Public Skepticism, Reputation Matters Even More
MANAGED CARE December 2006. ©MediMedia USA
A new survey sheds light on how health plan officials can best present their companies to concerned stakeholders
The HMO backlash of the 1990s clearly showed that America's health care consumers did not understand managed care's value proposition. (Who doesn't remember Helen Hunt's expletives regarding HMOs in As Good As It Gets?)
Nearly a decade later, however, the very drivers that prompted managed care's take-over of the health benefit landscape still exist: ongoing medical inflation, double-digit premium pricing, employer demands for greater transparency and quality, and general unwillingness of many Americans to embrace primary care versus specialty care.
To combat growing public cynicism, media scrutiny, and potential regulatory and legislative overhaul, health plans — including consumer-directed health plans (CDHPs) and their derivatives — will have to continue to redefine themselves as brands "worthy of buying." That's because as health care consumers we are being asked to do just that: Buy those brands that have earned our trust and that we believe mean what they say when promising predictable delivery of high-quality and affordable care.
Up to the challenge?
The question is: Are American health care organizations — be they health plans, hospitals, pharmaceutical manufacturers, or medical device makers — prepared to accept the challenge?
In a 2006 inaugural survey, the Public Relations Society of America's Health Academy reported in November that many health care organizations aspire to a good reputation, but just slightly more than half (53 percent) actually ever measure how reputation affects the bottom line. This lack of data has led to a serious level of uncertainty associated with health care organizations and the industry's brand fitness.
The authors found that the sampling (30 CEOs were polled) represents the thinking of many seasoned leaders on this most ethereal of subjects. More than three fourths (77 percent) of those surveyed have been in health care for more than 15 years; two-thirds have headed their companies for a minimum of four years, and 30 percent have been at the helm for seven to ten years. Hospital and health plan CEOs made up more than a third of the total sample.
The survey shows that today's health care CEOs value the impact and role of reputation. More than half (53 percent) said they expect that a positive shift in their reputation would "significantly" or "dramatically" affect their organization's bottom line. Conversely, nearly three-fourths (74 percent) said negative events would adversely affect their business. Overall, 63 percent felt that reputation was a "critical" or "very important" driver of a business and success.
Connecting the dots to consumers, it's clear that a positive reputation attracts loyal consumers. The ability of progressive MCOs to build, maintain, and even enhance reputation becomes all the more critical as short- and long-term risk management decisions might give consumers who have not been previously won over an excuse to find another health plan. Consumers, becoming more more active purchasers as a result of consumer-directed strategies, will come to look more discerningly at their choices for service and quality.
They will seek more third party education of what health plans are and what drives their success as it relates to their own purchase decisions. In short, reputation will be the outcome that requires consistent definition and, as survey participants acknowledged, drives growth.
If we accept these principles, then the fundamental question returns: How prepared are today's health plans to assess and manage their reputations?
The survey showed that as much as reputation is valued and desired, it is often not fully accounted for as a business strategy. While 53 percent of those surveyed said they measure their reputation in some form or another with internal and/or external audiences, a fairly large percentage — 40 percent — admitted they did not measure it.
What's to be gleaned from such data?
It may be fair to say that there's work to be done. Like a physician who looks at all vital signs to determine a patient's health status, today's MCOs need to be monitoring their reputation multi-dimensionally and as frequently as corporate resolve allows. Public companies have the stock market as an unbiased indicator of how they're perceived. But for those who do not, what can be done?
The answers lie within the organizations themselves, according to those surveyed. Many CEOs said that the amount of resources allocated to building and measuring reputation appears to be adequate. Others gave praise or passing marks to their organization's ability to manage corporate reputation initiatives, with 27 percent saying they were very satisfied with their internal management and another 50 percent saying they were satisfied.
But when it comes to health care and consumer expectations in this new era of consumerism, will a "satisfactory" effort win the day? Will it sway market share? Will a "satisfactory" reputation steer a prospective patient from one facility to another? Or one health plan to another?
One CEO said it best: "Misperceptions, myths, and stereotypes remain based on where our system was 10 to 20 years ago. We need to constantly reinforce the positive changes and our current role as a leader in health care nationally." If that sentiment holds true more broadly, then "satisfactory" may not be enough to get the job done in the new consumer-directed paradigm.
Reputation management means not only taking care of what people think you are today, but working to become what they want you to be tomorrow. Health plans willing to engage in more consistent measurement and management of the reputation continuum will have the means by which expectations can be best defined, met, and exceeded in the changing health care landscape. And that, as strategy, may be the optimum means by which savvy health plans and their leadership can meet consumers head-on in this new era of consumer-directed health care.